The BareStory
The Trump administration announced this week it will transfer many U.S. Department of Education programs to other federal agencies. The move follows a March 2025 executive order aimed at closing the department and the layoff of nearly half its staff earlier this year.
A senior administration official said that agreements have been signed with four agencies, including the Department of Labor and the Department of Health and Human Services, to manage various programs. According to the Education Department, the Labor Department will administer more federal K-12 initiatives. Education Secretary Linda McMahon wrote in a recent op-ed that the goal is to reduce federal bureaucracy by partnering with agencies better suited for the tasks, adding that a recent government shutdown demonstrated the department was not essential.
The current plan does not affect the government's more than $1.6 trillion federal student loan portfolio. Despite this, some financial aid experts and consumer advocates expressed apprehension. Carolina Rodriguez of the Education Debt Consumer Assistance Program called the department's destabilization "worrying," while Aissa Canchola Banez of Protect Borrowers warned that a future major loan transfer could cause errors and impede access to relief for borrowers.
Higher education expert Mark Kantrowitz stated the administration is trying to "hollow out" the department, noting that only Congress can formally eliminate it. The restructuring comes after an October report that administration officials were exploring selling some federal student debt to private companies. In a recent letter to officials, lawmakers claimed that private lenders are the subject of a disproportionate number of complaints filed with the Consumer Financial Protection Bureau relative to the number of loans they hold.
How it may affect me
As a U.S. reader:
• Federal K-12 education initiatives will be managed by agencies like the Department of Labor, potentially changing how schools interact with the federal government.
• Management of the $1.6 trillion federal student loan portfolio is currently unaffected, meaning no immediate changes for borrowers are planned under this specific restructuring.
• Experts warn that a future transfer or sale of federal student loans could cause administrative errors, hinder access to relief, or move loans to private servicers.
• The transfer of programs to different agencies is uncertain; it could streamline services as intended or cause disruptions for citizens who use those education-related programs.
